A Harder Look: Rules of Civil Procedure

The dawn of January 1, 2010 brought forward the much anticipated era of the new Rules of Civil Procedure in Ontario. The inception of the new Rules has presented counsel with new litigation strategies to defend claims. One of the most highly anticipated changes, from a strategic point of view, has been the changes to the summary judgment rule (Rule 20). The following update reviews some of the new Rule 20 cases that have been released, and the way in which the new changes have been interpreted thus far.

Although the language of Rule 20 has been amended, the case law supports many counsels' suspicions that the test for summary judgment remains largely unchanged. The wording of the Rule 20 test has been amended from “whether there is a genuine issue for trial”, to “whether there is a genuine issue requiring a trial”. As many counsel suspected, this change in language does not appear to have affected the threshold for granting summary judgment, and judges continue to use jurisprudence from the prior Rule 20 motions when considering the threshold for summary judgment. As Justice Karakatsanis explained, the test itself “has not changed” [Cuthbert v. TD Canada Trust, [2010] O.J. No. 630 (S.C.J)].

Whereas the test for summary judgment has largely remained the same, the new tools provided to the Court have had a significant impact on their ability to assess the viability of a claim or defence at an earlier stage and make a ruling on the merits. Not only is the Court now able to take a “harder look” at the evidence before it, but the Court now has the discretion to:

The only restriction in these powers is in situations where it is not in the interests of justice to exercise such powers at a motion rather than at trial. Alternatively, pursuant to Rule 20.04(2.2), a judge may also order that oral evidence be presented by one or more parties via mini-trial as a type of compromise.

With the addition of these broader powers, care must be taken to determine the types of cases best suited for these new tools. Based on the post-2010 Rule 20 motions that have proceeded thus far, it appears that the Court has been content to utilize these extended powers when there is a valid defence that would defeat an entire claim – eg. the failure to file within a limitation period.

In Zwaigenbaum v. Scher, [2010] O.J. No. 369 (S.C.J.), Justice Pitt was satisfied that there was sufficient evidence before him to draw reasonable inferences and grant summary judgment to the defendant. Justice Pitt found that the defendant had a valid limitation argument against the plaintiff, and conversely, the plaintiff’s discoverability arguments were unsubstantiated. Justice Pitt commented that the broader powers to address evidentiary issues now made it appropriate to address discoverability at a summary judgment motion. This is a serious departure from the old jurisprudence, where the Court of Appeal had concluded that such a determination was inappropriate on a motion for summary judgment [per Aguonie v. Galion Solid Waster Material Inc. (1998), 38 O.R. (3d) 161]. Notably, Justice Pitt’s reasoning in Zwaigenbaum was also followed by Justice Allen in Liu v. Silver, [2010] O.J. No. 1608 (S.C.J.).

Thus far, the most significant ruling that deals with the Court’s broader powers came in the case of Cuthbert v. TD Canada Trust, [2010] O.J. No. 630 (S.C.J.). In Cuthbert, the plaintiff brought a claim against the defendant for debiting monies from the plaintiff’s account when it discovered that the monies were fraudulently transferred.The plaintiff alleged that the monies debited by the bank were connected to a repayment of loans that were made by him. Conversely, the third party bank argued that the monies were traced to fraudulent mortgages on four different properties. The parties all brought simultaneous motions for summary judgment. Although Justice Karakatsanis warned that the new Rule 20 should not “substitute a summary trial for a summary judgment motion,” he concluded that the plaintiff was nonetheless unable to provide any legitimate evidence that he had received consideration for the fraudulent funds in his account. Justice Karakatsanis made the following comments when deciding in favour of the two banks:

I have taken a good hard look at the evidence, evaluated it, drawn inferences and made a finding of credibility in order to determine whether there was a genuine issue of a material fact for trial. I have concluded that the evidence of the Royal Bank’s claim for restitution is compelling; I have concluded, on the other hand, the evidence of the plaintiff’s claim that he received the funds in repayment of the loan is not credible and that it is not in the interests of justice that credibility be determined at trial. To this extent I have weighed and evaluated the evidence and determined that there is no genuine issue of a material fact requiring a trial.

In reaching his decision, Justice Karakatsanis relied on the Court’s new power to weigh the cross-examination transcripts and draw factual inferences. Justice Karakatsanis noted significant contradictions between two affidavits sworn by the plaintiff, his testimony on cross-examination during the motion, and the rest of the records filed into evidence, and found the plaintiff’s version of events not to be credible.

Although the new Rule 20 case law is still developing, the above-noted cases suggest that the Court will now be more willing to take a harder look at frivolous cases at an earlier stage of the proceedings. For insurers, this should allow for the more efficient resolution of clearly frivolous claims without incurring the full costs of a trial, or the need to pay out a nominal, nuisance-based settlement simply to reduce litigation costs.